Tuesday, 7 February 2017

Is the Golden Age of Fiat Currency Over?



Baltic Dry Index. 735 -17   Brent Crude 55.85

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

"We shouldn't pour cold water on everything.  We, the eight or nine players in global investment banking, have a very good future."

Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.

We open today with the view from Asia, where political uncertainty from Trump to China, to Europe is making the punters very nervous. What’s a leveraged gambling bankster or Great Vampire Squid to do? It was all so much easier under Greenspan-Bernocchio, rigging Liebor and all the rest.

Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Ebenezer Squid, with apologies to Cary Grant. To Catch A Thief.

Asia stocks, euro slide as economic, political uncertainty hits

Mon Feb 6, 2017 | 10:20pm EST
Appetite for Asian stocks and the euro evaporated on Tuesday as economic and political fears sent investors seeking shelter in the yen, while forecasts China's foreign exchange reserves has fallen for a seventh month added to jitters.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.15 percent while Japan's Nikkei .N225 dropped 0.45 percent as a stronger yen depressed stocks.

Chinese shares .CSI300 .SSEC were little changed, ahead of data expected to show that foreign exchange reserves fell for the seventh straight month by about $10.5 billion to $3 trillion in January.

But some economists said reserves may have actually risen due to tighter controls on moving money out of the country, as well the impact of a weaker dollar.

Nevertheless, as foreign exchange reserves linger at around $3 trillion, concerns remain over the speed at which China has depleted its resources to defend the currency.
Overnight, both U.S. and European stocks dropped.
More
http://www.reuters.com/article/us-global-markets-idUSKBN15L01R

Asian Equities Decline While Aussie, Kiwi Advance: Markets Wrap

by Garfield Clinton Reynolds
Asian equities declined as political uncertainty continued to infect markets across the globe. The Aussie erased losses after the country’s central bank left its key interest rate on hold while the kiwi rallied on inflation expectations.

Japan’s Topix index dropped for the first time in three days, after the yen touched the highest level since November on Monday. That comes after the S&P 500 Index retreated from near-record levels, with shares most tied to economic growth struggling after sagging wage gains and uneven retail results. The Australian and New Zealand currencies strengthened against the dollar, which advanced against most other major peers. Chinese equities slipped as investors awaited data on China’s foreign-currency reserves.

The Trump-fueled rally in equities is faltering as investors assess how the U.S. administration will balance protectionist trade rhetoric with promised tax cuts and spending increases. At the same time, traders are assigning greater risk premiums to European countries where anti-establishment movements are gaining traction ahead of elections. The Reserve Bank of Australia held interest rates unchanged as an upswing in global commodity prices eases the impact of slower economic growth.

What’s coming up in the markets:
  • Central banks in India, New Zealand, Philippines and Thailand also have meetings on monetary policy this week.
  • With a light calendar of U.S. economic data slated for the week, investors will keep an eye on political developments as the Trump administration takes swipes at the judicial branch for suspending its immigration order.
  • Germany delivers factory data on Tuesday expected to show output slowed in December from the prior month. In the U.K., industrial activity also may have moderated, with a report from there due Friday.
More

In rent-seeking European bankster news, still not a single lying, cheating, stealing, no good bankster has departed London for the flesh pots of the continent or New York. Just what does GB have to do to have them fulfil their pre-Brexit promise to move out? It seems London’s fickle banksters don’t like continental Europe’s taxes and laws. The rump-EU election uncertainty stinks too. Who wants to transfer to a Marine Le Pen France, a Schultz SDP Germany, or a Gert Wilder Holland, the country, not the French teenage love rat?  Poor John Bull may never get rid of them, and be stuck with another bankster bailout, the moment Deutsche Bank and the Italian banks blow up, which looks all too likely to happen before Easter.

"It's strange that men should take up crime when there are so many legal ways to be dishonest. “

Al Capone.

London or Paris? Choice proves a taxing question for bankers

Mon Feb 6, 2017 | 1:59pm EST
Forget fine wine, haute cuisine and art ... the big question from London's bankers for a French delegation trying to lure them to Paris was, how much tax will I pay?

"Most were interested in income tax and executive tax on pay," Gerard Mestrallet, president of France's finance industry lobby Europlace who led Monday's roadshow, said.

More than 80 representatives from banks and business met with authorities from Paris who are highlighting the attractions of the French capital if Britain's exit from the European Union forces the relocation of some activities to continental Europe.

Global banks and insurers have begun signaling how they cope with a "hard" exit from the EU, after Prime Minister Theresa May said Britain would leave the single market.

And Brexit has opened up "fierce competition" among the main financial cities of Europe -- which include Paris, Frankfurt, Dublin and Luxembourg -- Valerie Pecresse, the head of the wider Paris region, said.

HSBC (HSBA.L), Europe's biggest bank, has said it could move some of its operations to Paris, where it has a subsidiary that holds most of the licenses needed by an investment bank thanks to its purchase of CCF in 2000.

Pecresse estimated that the French capital could attract about 10,000 jobs, although bankers at the event raised concerns about French tax rules and labor laws as a possible deterrent.

"The expatriate regime has dramatically improved but there are also some concerns about labor flexibility," Mestrallet, who is chairman of French utilities Engie (ENGIE.PA) and Suez (SEVI.PA), said.

The French government introduced extra tax concessions for expatriates last year in the hope Paris could profit from Brexit, but experts say other centers with more flexible labor and tax rules are likely to be bigger beneficiaries.

With the exception of HSBC, most financial firms have yet to make a decision on relocation plans to Paris, according to Mestrallet. "Many will wait three months to have more clarity on the outcome of the French elections."
More

Merkel challenger Schulz gains ground in German poll

‘Phenomenal’ result raises prospect of election defeat for chancellor
Yesterday by: Stefan Wagstyl in Berlin
Martin Schulz, Angela Merkel’s new Social Democrat challenger, has stirred German politics by helping his party establish a lead over the chancellor’s conservatives in a national opinion poll — the first in more than a decade.

The rise in support, two weeks after Mr Schulz was picked as the SPD’s leader, increases the uncertainty in the run-up to the September Bundestag election and raises the possibility that Ms Merkel — once seemingly invulnerable — might even be defeated in her bid for a fourth term in office. 

“This is phenomenal,” said Hermann Binkert, head of the Insa agency, which published its results on Monday. “I would have said it was impossible to improve your ratings by 10 percentage points in 14 days. But that’s what’s happened.” 

According to Insa, support for the SPD has risen from 21 per cent two weeks ago, just before the former European Parliament president took over as party leader, to 31 per cent. The party has grabbed support from Ms Merkel’s Christian Democrat/Christian Socialist bloc, which is down from 32.5 per cent to 30 per cent, and from smaller parties, including the anti-immigration Alternative for Germany (AfD).

While other pollsters still put the conservatives ahead of the SPD, all recent surveys show the Social Democrats, which are in government in a “grand coalition” with Ms Merkel, have rapidly gained ground since Mr Schulz returned to German politics and succeeded Sigmar Gabriel as the party’s leader and presidential candidate.
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Most British voters now approve of May's approach to Brexit: poll

Mon Feb 6, 2017 | 12:50pm EST
A majority of Britons approve of the government's approach to leaving the European Union, a poll indicated on Monday, in a boost to Prime Minister Theresa May after she laid out her priorities for negotiations.
May set out her vision for Brexit in a speech in mid-January, outlining plans to leave the EU single market in a clean break with the bloc.

She had previously been criticized for being vague, and some lawmakers want further clarity before they will vote to start Brexit negotiations.

While May still faces some opposition from lawmakers, a majority of the public approve of her government's approach, for the first time since polling firm ORB began the series of polls in November.

The proportion of the public that approve of the government's preparations for Brexit stood at 53 percent, ORB found, up 15 points from a poll last month when only 38 percent approved, with 62 percent disapproving.

The poll also found that 47 percent agreed that May would get the right deal for Britain, with just 29 percent disagreeing. In January, it was evenly split at 35 percent between those who agreed and disagreed.

The two-year process of leaving the European Union is expected to be started by March, following a parliamentary vote this week.
More
He may look like a bankster and talk like a bankster but don't let that fool you. He really is a London bankster.
With apologies to Groucho Marx
At the Comex silver depositories Monday final figures were: Registered 30.20 Moz, Eligible 150.03 Moz, Total 180.23 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, welcome to La-La Land, the reality not the dubious  movie. CA, the land of fruits and nuts, as the old joke goes outside of California.

Californians are paying billions for power they don't need

We're using less electricity. Some power plants have even shut down. So why do state officials keep approving new ones?
By Ivan Penn and Ryan Menezes | Reporting from Yuba City, Calif. Feb. 5, 2017
The bucolic orchards of Sutter County north of Sacramento had never seen anything like it: a visiting governor and a media swarm — all to christen the first major natural gas power plant in California in more than a decade.
At its 2001 launch, the Sutter Energy Center was hailed as the nation’s cleanest power plant. It generated electricity while using less water and natural gas than older designs.
A year ago, however, the $300-million plant closed indefinitely, just 15 years into an expected 30- to 40-year lifespan. The power it produces is no longer needed — in large part because state regulators approved the construction of a plant just 40 miles away in Colusa that opened in 2010.
Two other large and efficient power plants in California also are facing closure decades ahead of schedule. Like Sutter, there is little need for their electricity.
California has a big — and growing — glut of power, an investigation by the Los Angeles Times has found. The state’s power plants are on track to be able to produce at least 21% more electricity than it needs by 2020, based on official estimates. And that doesn’t even count the soaring production of electricity by rooftop solar panels that has added to the surplus.
To cover the expense of new plants whose power isn’t needed — Colusa, for example, has operated far below capacity since opening — Californians are paying a higher premium to switch on lights or turn on electric stoves. In recent years, the gap between what Californians pay versus the rest of the country has nearly doubled to about 50%.
This translates into a staggering bill. Although California uses 2.6% less electricity annually from the power grid now than in 2008, residential and business customers together pay $6.8 billion more for power than they did then. The added cost to customers will total many billions of dollars over the next two decades, because regulators have approved higher rates for years to come so utilities can recoup the expense of building and maintaining the new plants, transmission lines and related equipment, even if their power isn’t needed.
How this came about is a tale of what critics call misguided and inept decision-making by state utility regulators, who have ignored repeated warnings going back a decade about a looming power glut.
“In California, we’re blinding ourselves to the facts,” said Loretta Lynch, a former president of the California Public Utilities Commission, who along with consumer advocacy groups has fought to stop building plants. “We’re awash in power at a premium price.”
California regulators have for years allowed power companies to go on a building spree, vastly expanding the potential electricity supply in the state. Indeed, even as electricity demand has fallen since 2008, California’s new plants have boosted its capacity enough to power all of the homes in a city the size of Los Angeles — six times over. Additional plants approved by regulators will begin producing more electricity in the next few years.
More
“A good politician is quite as unthinkable as an honest burglar.”
H L Mencken.

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

And just like that, China becomes the world's largest solar power producer

By Lulu Chang February 5, 2017 7:09 PM
Not only is it the world’s most populous country, it’s now also the world’s biggest producer of solar energy. On Saturday, the National Energy Administration (NEA) noted that the nation officially claimed the title after doubling its installed photovoltaic (PV) capacity last year. By the end of 2016, China’s capacity hit 77.42 gigawatts, and while this is great in terms of raw numbers, it’s a lot less impressive relative to the country’s massive population.

As it stands, solar energy represents only one percent of the country’s energy output. But this may soon change as China devotes more and more of its attention towards clean energy. The NEA says that China will seek to add more than 110 gigawatts within the next three years, which could help the nation up the proportion of its renewable energy use to 20 percent by 2030. Today, it stands at 11 percent.

China’s geography certainly lends itself to large solar energy farms. Last year, Shandong, Xinjiang, and Henan provinces enjoyed the greatest increase in their solar capacity, whereas Xinjiang, Gansu, Qinghai, and Inner Mongolia ended up with the most overall capacity at the end of 2016.

Weaning itself off of fossil fuels will require quite a hefty investment; one that China appears ready to make. As per a Reuters report, the nation will be pouring some 2.5 trillion yuan ($364 billion) into renewable power generation by the end of the decade.

This dedication to environmentally friendly energy sources could put pressure on other nations around the world to do the same. Already, Ireland has passed a bill that would make it the first country to divest from fossil fuels. And some countries are finding increasingly creative ways of moving away from fossil fuels — Iceland, for example, is drilling the world’s largest well for geothermal energy.
http://www.digitaltrends.com/cool-tech/china-solar-energy/

The monthly Coppock Indicators finished January

DJIA: 19864  +92 Up NASDAQ:  5615 +95 Up. SP500: 2279 +95 Up

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